Sony Slashes Profit Outlook By 70%, Curses Abenomics

As none other than the CEO of Sony explained 11 months ago, with regards Abe's strategy to weaken the JPY to encourage growth, "we are actually at a disadvantage [with a weaker JPY].. the preconception that a weaker JPY is good for all is, unfortunately for us, not true against the USD." And so 11 months on and Sony's profits and revenues are collapsing as the 'giant' electronics firm cuts its earnings outlook for the third time in a year. How bad is it? Sony posted a net loss of 130 billion yen ($1.3 billion) in the 12 months ended March... compared with a February loss projection of 110 billion yen, which was itself a reduction from a revised October forecast for profit of 30 billion yen. As one analyst noted, "There is no stop to their downward revision of earnings." So much for Abenomics?

Sony posted a net loss of 130 billion yen ($1.3 billion) in the 12 months ended March, the Tokyo-based company said in preliminary earnings reported today. That compares with a February loss projection of 110 billion yen, which was itself a reduction from a revised October forecast for profit of 30 billion yen.

The wider loss is a setback to Hirai’s plan to revive the fortunes of the Japan technology icon with new game consoles, smartphones and cost cuts. While the PlayStation 4 has won sales, Sony is struggling to come up with other hits as demand for traditional products like televisions, cameras and personal computers decline.

“There is no stop to their downward revision of earnings,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co. “They can’t get into a growth stage, and it’s difficult to recover. Unless they announce sales of the TV business, the market won’t think Sony is serious.”

Which comes just 11 months after the Sony CEO warned the world that a weaker JPY - the ubiquitous strategy for growth of Shinzo Abe - was actually a disadvantage for the giant Japanese firm (forward to 9:15)... in a brief moment of truth on CNBC, the CEO of Japan's mega corp Sony admitted that while, "the preconception is that a weaker Yen is good overall. Unfortunately for us, versus the USD, it goes the other way."

The Guardian adds that the firm is now actively trying to sell off less profitable businesses...as suggested by Dan Loeb

Sony's chief executive, Kazuo Hirai, has spent the last two years selling off key assets in a bid to restore profitability at the firm's struggling electronics division, where TVs have lost $7.8bn over 10 consecutive years.

The sell-offs included the sale of its US headquarters building in New York for $1.1bn as well as two major buildings in Tokyo for $1.2bn.

...

Sony said it would spin off its TV division into a separate business and sell its Vaio PC business when it announced its third-quarter earnings in early February. A further write-down of the PC division would add another ¥30bn in costs for 2013-14, Sony announced on Thursday.

Well played Abe... of course - none of that profitability stuff matters...

By Martyn Williams
December 10, 2008 12:00 PM ET
Sony Corp. has identified its Westmoreland, Pa., manufacturing plant as the second factory that will be shut down as part of a global restructuring announced on Tuesday.

The Westmoreland factory is Sony's last remaining TV manufacturing facility in the U.S., and the closure will result in 560 people losing their jobs.

On Tuesday, Sony said it planned to close about 10% of its 57 factories worldwide and lay off 8,000 full-time staffers and a similar number of temporary workers. The cutbacks are part of the company's effort to deal with business slowdowns in many major markets.

"The current economic climate was a key factor that led us to make the strategic business decision to streamline our manufacturing operations not only in the U.S. but worldwide," said Stan Glasgow, president and chief operating officer of Sony Electronics, in a statement.
Sony has been dealt a double blow by the current harsh economic conditions. A recession in its biggest markets is hitting sales, and the strong Japanese yen is cutting into profits on the products it does sell. In reaction to the appreciation of the yen, Sony said it will be forced to increase some product prices in 2009.
http://www.computerworld.com/s/article/9123160/Sony_to_close_last_U.S._T...

Think of all the standalone Sony product lines that have been collapsed into smartphones & tablets. Off the top of my head: music players, cameras, calculators, computing, video gaming, and even TV/entertainment viewing. People are still buying the gizmos, it's just that the gizmos have all been consolidated by competitors. Blaming Abe is a copout.

They can blame Abenomics all they want, but the truth is there is no reason to buy their more expensive product when you can get a lot more for your currency buying anything made in China. China is doing to Japan what they did to the U.S years ago.

Both companies screwed themselves with their next gen consoles when they didn't make them backwards compatible. They even fucked people when it came to hardware. There wasn't any change worth mentioning on the controllers, yet they made people buy new ones if they wanted more than one player. And what the hell are people supposed to do with a library of unplayable game?

The PS3 wasnt any better if you think about it. Blu-ray really was not necessary for games back then. It barely is now. But they included it so as to make Blu-ray more popular, eventually becoming the default HD media. So in that way PS3 buyers were just a means to an end. Gamers had to pay $200 extra to help ensure the success of their proprietary format. I said fuck it for this generation. Tired of being played. My 3 year old PC is just as powerful as a PS4 anyway.

Their bigger problem is that the main target audience for PS4 and Xbox are young men, and young men don't have any money. Kids are moving to online games that they can play for free. My 16 year-old son hasn't played his Xbox or bought any new games for it for years.

Sony's problems started before Abe, and even the before the ongoing Financial Crisis. If Sony put more towards build quality instead of trying to rig every device they manufacture to die once the warrenty ends, people would have continued to buy Sony products instead of moving on to another manufacture.

"The stock is down 1 % so far this year after surging 90 % in 2013"
Makes perfect sense, right...a company that lost $1.3 billion last year is down 1% ytd. Sounds about right. These "markets" are such a fucking joke.

Sony suffers from Large Japanese Corporation Syndrome. It seems like once any Japanese company hits a certain age and profitability, their management are given stupid pills and nobody has a vision that aligns the objectives of all the different divisions into a cohesive whole. Plus they fragment their own markets; for instance, producing too many different models of TVs in any given year - KISS.

Nevertheless, I have a PS2, PS3, and PS4 and I love them. PS+ is the best $50 a year I've ever spent on entertainment.

'The Mentor? of Keynes was Takahashi Korekiyo, who wrote the book six-years prior in Japan'

Abenomic's is nothing more than a wretched apostasy -- a forced-fed acquiescenced of dynasty's past`failures?!? An aboriginal apotheosis... that of a failed agent-of-change, mired deep in jingoism anachronism!

The parallels here are astoundingly absurd, considering the entities and their economies-of-scale, but...were none-the-less, fully plagiarized by Keynes... never to be proven or credited?!?

Final note: What the global financial institutions have evolved into, are abominations! So far have they strayed from purpose, logic and reality-- morphing into a 'metal-facade-structure' fired-up by invisable light? Indeed, the same amorphous arcane-esoteric opaque whited`sepulcher progenitor that regenerates world wars. Sad that the next world war will be nuclear, and all will perish because of Abenomic/Bernanke/Greenspan fools!